1)Sue and Larry are married and they each have $500,000 worth oflife insurance on the other’s life. Larry suddenly dies frombeing bitten by a mosquito. Sue collects the $500,000proceeds from the life insurance. What must Suerecognize in income due to the receipt of the life insuranceproceeds?

2)

During the current year, Ash had the following cashreceipts:

Wages $15,000

Child support payments 10,000

Dividends on corporate stock 1,200

Interestincome from treasury bonds 350

Based on the above information, what must be included in Ash’sgross income?